New Michigan Sports Betting Bill Hands Pro Leagues Win On Official Data

Use of official league data for in-game wagers switches from a regulatory option to a legislative mandate in the latest draft of the Michigan sports betting bill.

Draft four of a planned substitute for H 4916 permits sports governing bodies headquartered in the United States to notify the Michigan Gaming Control Board that they desire the use of official league data for Tier 2 wagers.

Sports betting operators would then have 60 days to comply with the request. A previous draft provided the board authority to determine if official league data was necessary and appropriate to determine the results of such bets.

The main purpose of the substitute remains to untether the Lawful Sports Betting Act from the Lawful Internet Gaming Act, allowing the former to stand alone with mobile wagering language if it can pass, but the latter cannot.

Rep. Brandt Iden tells Legal Sports Report that he plans to substitute the latest draft for the bill he introduced in September on Tuesday at a hearing of the House Ways and Means Committee, which he chairs. He hopes to advance the sports betting and iGaming bills out of the committee Tuesday.

‘Commercially reasonable terms’ get further explanation

If the board did decide to mandate the use of official league data, Iden’s previous draft provided operators the recourse of demonstrating that a sports governing body was not offering official league data at commercially reasonable terms.

The new language outlines a list of factors the board may consider in evaluating whether official league data is being offered on commercially reasonable terms:

1. That leagues make the data available from more than one authorized source.
2. Market information regarding the purchase by operators of data is from any authorized source in Michigan and other jurisdictions.
3. The nature and quantity of the data, including the quality and complexity of the process, is utilized for collecting the data.
4. The extent to which leagues or their designees have made data available to operators.

Michigan sports betting tax rate gets small bump

Iden is looking to increase the state tax on adjusted gross sports betting receipts to 8.75% from 8%.

Gov. Gretchen Whitmer previously released a Michigan Department of Treasury analysis, asking for a 15% tax on sports betting.

With the governor’s office not coming to the table to discuss the bill, Iden has resisted negotiating against himself and stuck with a rate favorable to the industry.

Even though the increase is small, it would bring the total tax rate for Michigan’s three commercial casinos, including the 1.25% they pay Detroit, to double digits at 10%.

Data mandate facing resistance elsewhere

Sports leagues secured victories this year in Tennessee and Illinois by lobbying for official league data mandates in place of an integrity fee, setting it up for Michigan to follow their lead.

Other states have balked at making such a concession to the leagues. There was no support for data fee requirements at a Missouri hearing last week.

Earlier this month in neighboring Ohio, lawmakers referred to an official league data mandate as an attempt at a monopoly.

The bill sponsor there asserted that the state should allow private entities to negotiate data agreements, pointing out that the market already is generating the environment to secure official league data.